Public Storage (PSA - Free Report) recently unveiled a new facility in Richmond, TX, that will offer more than 1,200 climate-controlled storage units and serve the growing Houston suburb. These units, with a range of prices, will satisfy personal and business requirements.
The facility marks the company’s seventh in the Houston area this year and is expected to serve the fast growing community, along with those in Sugar Land and neighboring master communities like Aliana Houston, Harvest Green and Long Meadow Farms, the company said.
Notably, expansion in Richmond is a strategic fit for Public Storage. This is because the population of Richmond has recorded 4% growth over the last five years, per the U.S. Census. The community is growing and there is an added demand for self-storage facilities from this expanding population.
Further, expansion efforts are being carried out on Grand Parkway, also known as Highway 99, to have capacity for additional commuters in the greater Houston area. As such, this facility being suitably located on the State Highway 99, can serve both Houston commuters and Richmond residents alike.
Moreover, the company has been making concerted efforts to enhance its presence in the growing Houston region and has added more than a million square feet of storage space in less than a year.
Public Storage is one of the largest owners and operators of storage facilities in the United States. The ‘Public Storage’ brand is the most recognized and established name in the self-storage industry, with presence in all major metropolitan markets of the nation.
The company is also capitalizing on growth opportunities. In fact, since the beginning of 2015 through Sep 30, 2017, it has acquired a total of 86 facilities with 6.2 million net rentable square feet from third parties for around $679.6 million.
In addition, since Jan 1, 2013, Public Storage has opened newly developed and redeveloped self-storage space for a total cost of $831.2 million, which added around 7.5 million net rentable square feet. Such acquisitions and expansions bode well for its long-term growth.
However, supply has been rising in a number of markets. This is a concern as it limits the company’s power to raise rents and turn on more discounting. Also, rate hike adds to its woes.
Shares of Public Storage have outperformed the industry it belongs to, in the past month. This Zacks Rank #3 (Hold) company’s shares have inched up 0.2%, while the industry edged down 0.1% during the same time period. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Better-ranked stocks in the REIT space include Franklin Street Properties (FSP - Free Report) , Columbia Property Trust (CXP - Free Report) and MedEquities Realty Trust (MRT - Free Report) . All three carry a Zacks Rank of 2 (Buy).
Franklin Street Properties’ Zacks Consensus Estimates for 2017 FFO per share remained unchanged at $1.05 over the past month. Its share price has ascended 6.7% in three months’ time.
Columbia Property Trust’s FFO per share estimates for the current year have moved up 2.7% to $1.15 in a month’s time. Its shares have gained 9.1% over the past three months.
MedEquities Realty’s FFO per share estimates for 2017 inched up 1.8% to $1.12 over the past two months. Its shares have gained 4.5% during the past month.
Note: All EPS numbers presented in this report represent funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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